RE: [ga] The Future of Domain Registry Pricing, if left uncapped

["Neuman, Jeff" <Jeff.Neuman@xxxxxxxxxx>]

George, 

My point in the full e-mail I sent out (which you only copied a snippet
of in this one) is that we are constrained in the current market place
because 1 registry operator controls 85% of the market and effectively
sets the price for the unsponsored gTLD market.  If we were to charge
significantly more for a .BIZ domain name as you insinuated with your
example (which you also deleted from your response to me), we believe
people would choose not to register or renew .BIZ domain names.

In our conversations and negotiations with ICANN staff over the last
several years, it was our understanding that ICANN wanted to get out of
the price regulation business and let the market determine pricing.  An
example of ICANN's intent to allow registry operators and the market
conditions to determine price are the sTLD Agreements for .travel,
.mobi, .asia, .tel, .cat, etc.  Some of these new TLDs could easily
become the size of .biz or greater.

The only reason that caps were included in the .com and .net agreements
were because 1 operator controlled 85% of the market and without
limitations could unreasonably inflate the market pricing.  With less
than 2% of the market, we have no ability to affect the overall market
price for gTLD domain names.  That said, we fail to see why any specific
or arbitrary price caps would be needed for .BIZ which has such a small
market share.  

P.S. In the future, please do not copy people outside of the GA list on
your e-mails.  Particularly if you are only going to copy a snippet of a
prior e-mail thereby eliminating all of the context in which the
previous statement was made.  It can be misleading to do so.

Thanks.

Jeffrey J. Neuman, Esq. 
Sr. Director, Law, Advanced Services  & Business Development 

NeuStar, Inc. 



-----Original Message-----
From: George Kirikos [mailto:gkirikos@xxxxxxxxx] 
Sent: Tuesday, August 08, 2006 3:24 PM
To: Neuman, Jeff; ga@xxxxxxxxxxxxxx
Cc: jeffrey@xxxxxxxxx; vint@xxxxxxxxxx
Subject: RE: [ga] The Future of Domain Registry Pricing, if left
uncapped

Hi Jeff,

I forgot to comment on another item:

--- "Neuman, Jeff" <Jeff.Neuman@xxxxxxxxxx> wrote:
> Although you insinuate that we could raise prices, do you honestly
> believe that we could really get away with raising prices and not
> suffer
> a huge loss in the demand for our services?  We operate in a real
> economic market and not in a theoretical hypothetical world.  In
> other
> words, do you really think .BIZ could get away with raising prices
> above
> that for a .com domain name and survive?  We do not.  We believe that
> if
> we were to raise prices without a corresponding increase in .com
> prices,
> registrants would switch from .BIZ to .com or .net in a heartbeat.

If you actually believe what you just wrote above, that in the "real
world" you are unable to raise prices above .com, then that means it
costs you nothing to agree to caps of some sort, instead of having the
power to raise prices to infinity on a domain by domain basis.

What you said above is that there is no economic value to you to have
the ability to raise prices above .com. Thus, you will have no problems
agreeing to the same caps as .com. Do you agree to have the identical
price caps as .com? Why do you need unlimited pricing freedom, if you
would never use that power?

I have cc'd the General Counsel and Chairman of ICANN, who I'm sure
stand ready to amend the contract to remove items from the contract
that you say have no value "in the real world", and presumably don't
mind losing. This will make the contract more palatable to the rest of
us.

Sincerely,

George Kirikos
http://www.kirikos.com/